California business group files suit against state 'cap-and-trade' scheme

The California Chamber of Commerce has filed a lawsuit seeking to invalidate California’s "cap-and-trade" auction, arguing that the California Air Resources Board (CARB) exceeded the authority granted to it under state law (AB 32) in establishing the revenue-raising program.

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The California Chamber of Commerce has filed a lawsuit seeking
to invalidate California's "cap-and-trade" auction, arguing
that the California Air Resources Board (CARB) exceeded the
authority granted to it under state law (AB 32) in establishing
the revenue-raising program.

The complaint asserts that AB 32 does not authorize CARB to
impose fees other than those needed to cover ordinary
administrative costs of implementing a state emissions
regulatory program.

"What was not authorized by AB 32 is the Board's decision to
withhold for itself a percentage of the annual, statewide
greenhouse gas (GHG) emissions allowances and to auction
them off to the highest bidders, thus raising from taxpayers up
to $70 billion or more of revenue for the state to use," the
complaint stated.

The lawsuit does not challenge any of the provisions of AB 32
nor the merits of climate change science. The only issue
addressed in the litigation is the portion of CARB's regulatory
program that seeks to permit the Board to allocate to itself
GHG emissions allowances and to profit
by selling them to GHG emitters.

The California business community believes the auction will
raise energy costs in the state, harm the economy and impact
California's competitiveness without providing any additional
environmental benefits.

"AB 32 gives California the opportunity to be the leader in
reducing carbon emissions," said Allan
Zaremberg, CEO of the California Chamber of Commerce. "Unless
we adopt the most cost-effective way of reducing carbonemissions, other states will not
follow us. The current CARB proposal is the most costly way to
implement AB 32, and it will hurt consumers, the job climate
and the ability of businesses to expand here."

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